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November 09, 2016

Bizarro Carter

What happened last night makes no sense unless you believe, as I do, in the life cycles of history. The only way to accept it and to fight it is through an understanding of economic determinism.

First, life cycles. People believe what they believe for a lifetime. It’s why a set of political assumptions, what I have called a Political Thesis, can hold people even after it no longer works. The Nixon Thesis of Conflict stopped working under George W. Bush, so Barack Obama was elected.

Obama was a Reaganesque figure at a time that called for someone who was more like Nixon. We needed someone who knew their enemies and would be ruthless against them. We should have nominated Hillary Clinton in 2008. Obama was too passive in the face of obstruction, too complex as people came to demand simple answers. He will be judged a failure until someone else makes him a success.

A second important point. People live longer than ever now. Both candidates this year were Ronald Reagan’s age. If you survive to 65 you’ll probably make it to 83. People who came to political maturity under Reagan or the first Bush should have died by now. They haven’t. This made Trump possible.

What made Trump happen was economic determinism, and it has happened before. I was alive when it happened, in 1976.

That year I cast my first vote, for Gerald Ford. Everything seemed bright and happy in Houston, where I was attending Rice University, but life was bleak on the coasts. There was stagflation, which Ford tried to fight with a button, and rising crime, while he told New York to drop dead. The real estate recession that began in 1974 would not lift until the early 80s.

The economic and political power centers dating from the time of FDR and Harry Truman – manufacturing, trade, and the mainstream media of newspapers, radio and movies, combined to elect Jimmy Carter. He was the last Roosevelt Democrat, not a visitor from the future but from the past. His coalition came from the suffering coasts, and from the manufacturing industries that were then only suffering from rising prices, not being destroyed by them.

Carter’s election forced the oil industry to get into politics. Before Carter, oilmen assumed the goodwill of politicians and most didn’t have to pay for it. But Carter was a direct threat to their prosperity. He talked seriously about the energy crisis, about the need to conserve, and about alternative energy sources. He was for cutting resource costs to support manufacturing.

So, oilmen got busy. I covered it. People like the Koch brothers began building a political infrastructure that would be loyal to oil interests. They began supporting candidates directly, with big dollars. They created the “sagebrush rebellion” in the West, and won the 1978 midterms. Oil’s first choice for 1980 was John Connally. I stood alongside George H.W. Bush one evening in 1979, while he was ignored by Connally men at an oil company cocktail party. But Connally flamed out, and when Bush lost to Reagan in the primaries, oil got their man Bush on the ticket and went all-in.

The result you know.

Today, technology faces a similar situation to what oil faced in 1976. Donald Trump drew his political support from the Reagan coalition, from the oilpatch and other resource producers, as well as exurban elites who had lost control over urban development to an explosion into cities driven by technology. The Internet, and the cloud, replaced a host of middle managers and small businesses this decade with apps, and have limited the need for resources like oil with cloud efficiency.

This sounds good if you’re on Wall Street, in Silicon Valley, or in other technology-driven cities like Seattle and Atlanta, where I live now and everyone voted Democratic. The technology industry got everything it wanted from Barack Obama, without having to do much to earn it beyond build him a database.

Now they must go all-in to overthrow Trumpism.

Trump is a direct threat to the technology industries. He wants higher resource prices. More important, his ultra-nationalism is a threat to the Internet itself. The Internet is in the process of being balkanized, as cloud has been balkanized by governments demanding that data stay within their borders. The demand now is that knowledge and the Internet’s users obey local laws. Every country has their own set of facts, and beliefs people are expected to follow. The Internet threatens this. There is a worldwide effort to put it back into the bottle. This is very, very bad for Facebook.

By contrast China is ready for the Internet-cloud future. China’s leaders have political control over the resource, and businessmen know that so long as they avoid politics they have the leaders’ full support. China has an enormous market of 1.3 billion people, and every incentive to cut the cost of resources, both to sustain manufacturing and to make the air breathable. While oil demand from China is increasing, so is efficiency, and so is renewable energy, which can be supplied directly from within China at a lower environmental cost.

Trump is going to make America unready for this future. China is where you want your money over the next four years. Tech must take Trump down if it is to compete with China in the tech markets of the future – robotic manufacturing, self-driving cars, smart utility grids, and the Internet of Things.

Tech billionaires have the money to do this. Bill Gates, Mark Zuckerberg and Jeff Bezos can all buy-and-sell America’s government many times over, if they want, using what for them is pocket change. They didn’t do that in 2016.

They are going to need to do that now. Over the next few months you’re going to see a lot more money going into think tanks and interest groups, driven by tech dollars. You’re going to see a lot more political pros, veterans of the Obama Administration, go into these think tanks, to start creating issues and building up candidates.

Trump has no public service record, so why should his 2020 challenger? The most logical candidate will be whoever emerges as Governor of California in 2018. Whoever the tech industry anoints will win that race. It could be an actual technology billionaire. Mark Zuckerberg will be 36. He might put up his COO, Sheryl Sandberg. She could double as both the first female and the first Jewish President. Or, in 2020, we might run Bill Gates. The point is that someone will emerge. The early tech industry created Reagan, and Reaganism. They can do that again, and they have every incentive to do that again.

One other thing. Time passes. Every day 130,000 people in the developing world are lifted out of poverty. Every day Trump voters are dying, and young people devoted to technology are taking their place. America will be even more diverse in two years than it is now, and facing a demographic cliff with only immigration available if its elders want their backsides wiped.

The work starts now. It will gain urgency as Trump implements his program. It will gain support as Trump fails to stop economic history. Manufacturing jobs just aren’t coming back. China is not going away. There may be another few years of growth, driven by construction and defense, but as the Internet is balkanized we are going to hit the economic skids very quickly.

Comments

What happened last night makes no sense unless you believe, as I do, in the life cycles of history. The only way to accept it and to fight it is through an understanding of economic determinism.

First, life cycles. People believe what they believe for a lifetime. It’s why a set of political assumptions, what I have called a Political Thesis, can hold people even after it no longer works. The Nixon Thesis of Conflict stopped working under George W. Bush, so Barack Obama was elected.

Obama was a Reaganesque figure at a time that called for someone who was more like Nixon. We needed someone who knew their enemies and would be ruthless against them. We should have nominated Hillary Clinton in 2008. Obama was too passive in the face of obstruction, too complex as people came to demand simple answers. He will be judged a failure until someone else makes him a success.